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In an oblique reference to being dragged to the World Trade Organization’s (WTO) dispute settlement mechanism by the US over export subsidies, Union Commerce and Industry Minister Suresh Prabhu said there was a general misconception that India was providing subsidies to its exporters.
Prabhu said India was merely trying to create enabling factors so as to “partially offset” the lacunae in infrastructure and other adversities with a view to help exporters access global markets.
“There is a misconception that we subsidise our exports, while actually we don’t. What we give to the exporters in India is not any subsidy or incentive to promote exports, but a way to partially offset the inadequate infrastructure support they have and the high interest cost,” the minister said at an award function organised by SHEFEXIL (Shellac and Forest Products Export Promotion Council).
In doing so, India was not violating the global trading system, he added.
Talking about the need to adhere to higher standards for products and services to boost exports and to ensure better realisation of prices, Prabhu said, the commerce department is already working on the development of standards.
WTO under threat?
Later in the day, speaking at an interactive session organised by the Federation of Indian Export Organisations (FIEO), Prabhu said global trade has been passing through “challenging times”.
According to him, the existence of the WTO was under “threat”.
“Today, it is the most challenging time for global trade... we never had such a challenging time. For the first time, the existence of WTO is under threat. People are questioning the accepted trading norms,” he said.
Rule-based order
Emphasising the importance of the WTO, he said it guarantees certain rules and regulations by which global trade is run. “There will be chaos if you don’t have the WTO.”
Talking about the need for making the organisation strong, he said, “We are not only talking of the reform of the WTO, but also working on how to revitalise it. I personally work with important ministers of the world and am trying to find out (the way forward). Improving WTO is one thing and discarding it is a different thing.”
The Indian government was also working on “specific bilateral relationships” with various countries and blocs in Latin America, Africa, Europe And Asia.
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